Spotting entry and exit points with heikin_ashi

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I plan to backtest this strategy with real tick data.
I coded the indicators, but not the strategy. I am still reading this thread.
@MikeWolski , what currency do you trade?

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Hey Mihk
I trade the JPY.
Either long or short.
Thanks for the interest!

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But I trade the daily time frames, only.

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I think I got the HA Bar and LWMA for 1 Day timeframe calculated correctly. Switching my code from EUR to JPY pairs showed some annoying bugs I had to fix. I am still not done with the strategy. I will code it in the coming week.

I wanted however to post an intermediary backtest result I’ve done with the skeleton of a simple HA strategy. Enter/Exit at the change of the color of the Daily HA Bar.

gbp_jpy_2017 heikin ashi PnL 335.txt (6.9 KB)
usd_jpy_2017 heikin ashi PnL-749.txt (6.9 KB)
eur_jpy_2017 heikin ashi PnL-49.txt (6.9 KB)

I was surprised by the poor performance as I personally like the HA Candles. I think the main reason is that the price is already far away when you get a confirmation candle. Maybe this is also the reason captgrumpy strategy says to enter/exit when the LWMA5 makes a small spike up or down.

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Hey everyone!

I have been reading through all the comments and your system has got me very interested, I will test and see for myself too.

I was wondering of any of you could give an update on how the trading has been, changes, etc?

Thanks for the good information.

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Captain Grumpy may have been correct when he said the WMA2 was the better (faster) option to get in/out of trades.

I say this because

  • the HA candles alone are so far behind real candles in indicating change when used as part of a WMA system alone, and
  • up to 30% of pips in some trades are falling on the floor, because of these late entries/late exits, and
  • using WMA5 as opposed to WMA2.also means trades are missed or entered/closed a day too late.

The three bullet points above all point to the same problem: late entry and late exits have cost pips.

This is not the right place to say this, since it is a thread on spotting entries/exits using HA candles.
But since the thread has withered and has a very weak pulse, I’m going to be bold and say it anyway:
The strategy would be a killer if weak trends or whipsaws could be identified as an adjunct to the main theory.

As far as I can see, there is a lot to be gained here by the addition of a trend-strength indicator, such as the ADX.

I may begin a new thread incorporating the WMA2, instead of WMA5, and use the ADX, or Stochastic-RSI indicator as a filter, with respect to Captain Grumpy and all the above participants who so freely gave of their time here. Other than that, I propose to keep everything else intact.

I never did understand why the PTP was used - it seemed too circumstantial for me.
I would have thought that a change of candle colour would be a more verifiable concept.
We’ll see.

I may also include a comparison with the candle chart , as a filter to keep out of trades that have a high probability of whipsaw/failure.

I am sorry your efforts did not bear fruit - you certainly gave it your best.
Most of the proponents here simply burned out I believe.
Well done people. Thank you.

When/if I initiate a new thread, I will post a link to it here - I think this concept deserves further exploration.

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Have commenced a Journal to discuss a similar approach combined with filters to ensure trend and try to avoid whiplash activity.

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